Sounds like a diversion tactic, and that's all. You yourself questioned why the best school would go after those players (I could copy and paste, but I don't want to show off my skills like that :p ). If they aren't players that he'll sign, just hold out and they'll automatically go back green to you once he's filled his schollies.
If you're correct that they aren't good enough for him to sign, then he wouldn't be a very good coach to sign them just to prove a point. I'm suspecting he won't.
Of course you can have your own view on it, but FWIW I don't think it's cheating. He's making you choose between covering your flank or calling off your assault. The lesson I'd take is if you can't cover your flank, call off the attack. Have a great season, get some playoff cash for next recruiting period and be in a better position to battle.